BY PROVIDENCE OBUH

The intervention fund for Microfinance Banks (MfBs) also known as Micro Small and Medium Enterprise (MSME) Fund would be launched this month as promised by the Central Bank of Nigeria (CBN) for re-financing of the sub-sector and on-lending to the poor but economically active people.

MfBs were introduced to help small-scale entrepreneurs enlarge their businesses, especially market men and women. However, inadequate funding is a major threat that has bedeviled the sub-sector, posing a great challenge that needs to be addressed urgently if microfinance scheme is to achieve the objective for which it was established.

Operators’ expectations are now high but whether the Fund would be launched or not, is a question waiting to be answered by the CBN as no specific date was given by the apex bank.

During the 5th Annual Microfinance Conference and Entrepreneurship Awards in 2011, Kingsley Moghalu, the Deputy Governor, Financial System Stability, said that the CBN would establish a Microfinance Development Fund to promote accessibility to financial services for low income earners.

Today, MfBs in Lagos alone have a toxic asset of about N14 billion, says Mr. Valentine Whensu, Chairman, National Association of Microfinance Banks (NAMB), Lagos State chapter.

The chapter is making arrangement to constitute the Microfinance Money Market Association (MMMA), aimed at providing short-term liquidity for its members.

The Chairman, Board of Directors, King Solomon Microfinance Bank, Mrs. Angela Adegboyega, also lamented that people fail to realise that microfinance banks are set up by individuals who put their money together to help others. “MfBs in the country have a major role to play and what they need is support from the CBN and the Federal Government by providing fund,” she said.

Adegboyega advised the CBN to put out fund and make it available and identify the microfinance banks that they want to partner with in disbursing the fund.

“SMEs are globally recognised as key instrument for development and poverty alleviation and microfinancing is critical to any economy as a result of its contribution to growth and serving over 70 per cent of the population,” she said.